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CME: Corn Futures Closed Higher Wednesday

29 November 2012

US - December Corn finished up 1/4 at 760 1/4, 3 off the high and 5 1/2 up from the low. March Corn closed unchanged at 764. This was 5 1/4 up from the low and 3 1/2 off the high.

March corn ended the day slightly lower but traded both sides of the unchanged. Basis in the Gulf of Mexico was steady on light demand but low water levels on the Mississippi River south of St. Louis continues to help support.

The stronger trade in the wheat market helped to lift corn to new highs this morning but the action settled down as soybeans trended lower off early highs.

This morning's ethanol stocks report was considered mixed against trade expectations. Ethanol production for the week ending November 23rd averaged 803,000 barrels per day, down from 811,000 last week and down 13.7 per cent vs. last year.

Total ethanol production for the week was 5.62 million barrels. Corn used in last week's production is estimated at 84.3 million bushels vs. 85.16 last week.

This crop year's cumulative corn used for ethanol production for this crop year is 1.02 billion bushels. Corn use needs to average 86.64 million bushels per week to meet this crop year's USDA estimate of 4.5 billion bushels.

Stocks as of November 23rd were 18.35 million barrels. This is down 3.06 per cent vs. last week and up 7.63 per cent vs. last year.

January Rice finished up 0.105 at 15.19, equal to the high and 0.14 up from the low.

Soy Futures Closed Lower

January Soybeans finished down 3 at 1446 1/4, 10 1/2 off the high and 6 1/4 up from the low. March Soybeans closed down 2 1/2 at 1435. This was 7 up from the low and 10 1/2 off the high.

December Soymeal closed up 0.6 at 439.9. This was 1.6 up from the low and 3.0 off the high.

December Soybean Oil finished down 0.01 at 50.11, 0.09 off the high and 0.45 up from the low.

January soybeans traded slightly lower to finish the day. Oil saw modest losses while meal finished lower on market on close sell pressure.

The soybean market traded mostly negative throughout the day after failing to see follow through momentum overnight to the upside. Losses were limited due to strength in the corn and wheat market and also after the USDA reported that US exporters sold 290,000 tonnes of soybeans to China for the current marketing year.

The demand picture continues to be robust but the overall weather outlook for South America remains mostly favorable which is adding resistance.

Central and northern Brazil continue to see steady precipitation which has improved conditions while Southern Brazil is trending drier but is expected to see an uptick in rainfall. Argentina will see another shot of precipitation at the end of this week followed by a drier weather pattern.

Basis in the Gulf of Mexico was steady to slightly weaker nearby but still well above historical levels. Concern that low water levels on the Mississippi River south of St. Louis may slow supply to the Gulf of Mexico is adding support to cash markets.

Wheat Futures Closed Higher

December Wheat finished up 3 at 876, 4 off the high and 11 1/4 up from the low. March Wheat closed up 2 3/4 at 891 1/4. This was 11 1/2 up from the low and 4 1/4 off the high.

Chicago, KC, and Minneapolis wheat ended the day with marginal gains but traded in positive territory throughout the day. Strong cash markets and the terrible weather conditions in the western plains continue to support the US wheat markets this week.

The sluggish demand fundamentals have been set aside as traders instead focus on the potential for deteriorating supply of winter wheat next year.

No significant precipitation is expected in the next two weeks and temperatures are expected to be above normal which will keep some wheat from entering dormancy in the south. Conditions in the east remain mostly favorable.

Very poor soil moisture conditions have improve since September which should promote good root and stand establishment for much of the Soft Red Winter wheat growing region.

US Soft Red Winter wheat has become competitive in the global market so some traders expect the US wheat export sales pace to pick up in 2013 which could add additional support to the trade going forward.

December Oats closed down 2 1/4 at 370 3/4. This was 1 up from the low and 5 1/2 off the high.

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